September 2, 2024
New Delhi, India
Gala Precision Engineering’s Initial Public Offering (IPO) is now open for subscription from September 2 to September 4, 2024. The company has set the IPO price range between ₹503 to ₹529 per equity share, with a face value of ₹10 each. Anchor investors have contributed ₹50.29 crores, showing strong initial interest.
Key Details:
- IPO Price Band: ₹503 – ₹529 per share
- Anchor Investor Contribution: ₹50.29 crores
- Lot Size: 28 shares, with additional shares purchasable in multiples of 28
- Subscription Dates: September 2-4, 2024
IPO Subscription Status and Allocation
As of the first day of subscription, the IPO has been subscribed 4.54 times, according to BSE data at 13:15 IST. The public offer received bids for 1,01,00,944 shares against 22,23,830 shares on offer.
- Retail Investor Subscription: 5.91 times
- Non-Institutional Investor (NII) Subscription: 6.61 times
- Qualified Institutional Buyers (QIBs) Subscription: 45%
- Employee Portion Subscription: 20.02 times
IPO Structure and Objectives
The Gala Precision Engineering IPO consists of a fresh issue of 2.56 million shares and an offer for sale (OFS) of 616,000 shares by existing promoters and shareholders. At the upper price band of ₹529, the total issue size amounts to ₹167.93 crore, with the fresh issue valued at ₹134.34 crore and the OFS at ₹32.58 crore.
Use of Proceeds:
- Establishing a new facility in Vallam-Vadagal, Tamil Nadu, for manufacturing hex bolts and high tensile fasteners.
- Financing capital expenditures for machinery, plant, and equipment in Wada, Maharashtra.
- Repaying or prepaying part of the company’s borrowings.
- General corporate purposes.
Clientele and Business Overview
Gala Precision Engineering specializes in precision components, including disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS). The company serves over 175 global customers, including OEMs, Tier 1 suppliers, and channel partners in sectors like automotive, railways, general engineering, and renewable energy.
Some key clients include:
- Renewable Energy: Vestas Wind Technology, Enrecon GmbH, GE India Industrial Pvt Ltd.
- Industrial: L&T Electrical & Automation, Schneider Electric India Pvt Ltd.
- Automotive: Schaeffler India Ltd., Brembo Brake India Pvt Ltd., Hitachi Astemo Chennai Pvt Ltd.
- Railways: Faiveley Transport Rail Technologies India Pvt. Ltd.
For the fiscal year 2023–2024, the company reported an operating revenue of ₹202.54 crore and a profit after taxes of ₹22.33 crore.
Grey Market Premium and Expected Listing Price
The Gala Precision Engineering IPO is trading at a grey market premium (GMP) of ₹240, indicating a strong market response. Based on this premium, the estimated listing price of the shares could be around ₹769 apiece, which is approximately 45.37% higher than the upper IPO price band of ₹529.
Disclaimer:
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